Enhancing sustainable development in West Africa despite uncertainty: The transformative potential of green financing

Journal of Climate Finance Pub Date : 2025-09-11 DOI:10.1016/j.jclimf.2025.100074

Joshua Adeyemi Afolabi

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Abstract

Despite the increasing evidence on the adverse effects of uncertainty on sustainable development, little is known about how green financing can mitigate this effect. This paper assesses the transformative potential of green financing in promoting sustainable development amid prevailing uncertainties in West Africa, drawing on evidence from developed regions. Four different static and dynamic model estimators are employed to analyse relevant data for the 2010–2022 period drawn from 14 West African countries. The empirical findings show uncertainty as a major impediment to sustainable development, while green financing enhances sustainable development in West Africa. Further results present green financing as a significant moderator of the negative effect of uncertainty on sustainable development. The results remain robust across various estimation methods and alternative measures of green financing. Thus, the lacunas in existing green financing frameworks in West Africa must be fixed while developing/strengthening modern frameworks and policies to enhance sustainable development.

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在不确定的情况下促进西非的可持续发展：绿色融资的变革潜力

尽管越来越多的证据表明不确定性对可持续发展的不利影响，但人们对绿色融资如何减轻这种影响知之甚少。本文利用来自发达地区的证据，评估了绿色融资在西非当前不确定性背景下促进可持续发展方面的变革潜力。采用了四种不同的静态和动态模型估计器来分析来自14个西非国家2010-2022年期间的相关数据。实证结果表明，不确定性是可持续发展的主要障碍，而绿色融资促进了西非的可持续发展。进一步的研究结果表明，绿色融资对不确定性对可持续发展的负面影响具有显著的调节作用。在各种评估方法和绿色融资替代措施中，结果仍然稳健。因此，必须弥补西非现有绿色融资框架中的空白，同时制定/加强现代框架和政策，以促进可持续发展。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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Journal of Climate Finance

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